The contingency plan – how short-term HR solutions hurt employers

3:21 October 4, 2012

Associate Professor Peter Holland

Australia is in an unusual position among advanced market economies; it has shortages in specific skills that appear ongoing, plus an increasingly mobile workforce. For that reason, most of the focus for management has been on talent management through the attraction, retention and development of core permanent staff. Research in this field continues to show that this (as opposed to a focus on filling the workplace with part-timers and fixed contact employees) is critical in attracting top quality employees who will engage and commit to an organisation’s goals.

The evidence also shows that Australian permanent workers are in the top group in the world when it comes to the amount of unpaid hours they work, with many working over 50 hours a week, even if their contract stipulates the standard 37 hours. This is part of an ongoing commitment by both the employer and the employee to the work and workplace.

For employers who make a clear statement that they do not intent to develop a relationship with employees and who simply terminate staff when the environment gets unpredictable, there may be short-term gains on the balance sheet, but there will be long-term pain in terms of productivity. A workplace filled with non-committed workers going through the motions until something better comes along, or before they are axed, does not make for high engagement. In these days of social networking – take as an example the ‘naked office’ website, which allows people to post their opinion of organisations at which they’ve worked – organisations working by this philosophy are likely to develop reputations as ‘churn and burn’ employers and unlikely to attract high-quality, committed workers.

This conference commenced on the same day as the release of a report titled Men Get Flexible! Mainstreaming Flexible Work in Australian Business. Produced by Westpac and supporting sponsors Stockland, Origin and Allens, it has highlighted the need for more flexible work arrangement for core male employees.

More flexible work arrangements can generate positive outcomes for men, women, families and organisations. By focussing on innovative work practices, understanding employees’ needs and increasing men’s engagement in flexible work, organisations are helping to move flexible work from an afterthought into mainstream workplace planning.

Whilst the conference organisers have denied promoting contingent workforce over permanent, the conference flyer clearly demonstrates a focus on cost-cutting measures associated with a contingent workforce. What is implicit from this is that encouraging investment in the development of the workforce is unlikely.

It is clear the workplace has changed. More and more, as a full-time male bread winner upon whom a family relies starts to become a less dominant standard, people are seeking flexibility and variable work hours to suit their lifestyles. Most organisations have developed a mix of full- (core) and part-time/casual and contract employees.

This allows staff to work the patterns they want and is likely to enhance workplace commitment among permanent staff. At the same time, part-time, casual and contract workers provide flexibility when demand varies. They can also offer expertise; the conference emphasises that contingent staff are a way to bring specific skills into an organisation as and when required.

A key consideration for employers is the question of where an organisation’s corporate knowledge is stored if the workplace is inhabited by people simply passing through. Whilst such a core-periphery model of employment may not be perfect, at the core of it is a focus on the key asset of all organisations – its people. This is very much the key to productivity in a knowledge- and service-based global economy.

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